9 Cloud Computing Concepts Every Tech Entrepreneur Should Understand

The cloud: it’s everywhere and nowhere, depending on whom you ask. Despite its name, the technology known as cloud computing is very much earth-based: vast server farms distributed across the globe by a smattering of leading vendors like Amazon, Apple, and Microsoft. And sometimes even the savviest of tech entrepreneurs come up short when describing what it is.

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Despite the lofty imagery evoked by its name, cloud computing provides grounded benefits in the form of unprecedented quality of service and lower cost of IT ownership, primarily in the form of on-demand servers and resources.

The following are 9 fundamental cloud computing concepts every entrepreneur should be familiar with.

9. NIST offers the most accurate definition of cloud computing.

Source: nist.gov.

The National Institute of Standards and Technology’s (NIST) definition of the cloud is “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” The century-old bureau—responsible for setting standards for measurements—lays out this comprehensive description covering most of cloud computing’s defining characteristics.

8. Cloud computing is the timesharing of servers and IT resources.

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Like a real estate timeshare that allows buyers to purchase vacation property for a specific usage period, cloud computing is essentially the same—but for servers. The basic premise is that through the timesharing of IT resources, unprecedented cost savings and quality of service can be realized by organizations both large and small.

7. No end-user knowledge is required.

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Hosting a physical server more or less involves data center or colocation facility management; with cloud computing, end users are not only free of dealing with this minutiae, they do not have any knowledge of where computation, software, data access, and storage services reside physically.

6. Cloud servers are configuration-less.

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In PaaS and SaaS service models, end-users are not responsible for the configuration of the system that delivers the services. In this sense, cloud computing services are analogous to a public utility electricity grid: you “plug-in” for your services, then “unplug” when you’re done.

5. Most cloud computing services are billed using a metered model.

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Cloud computing usage is metered: you only pay for what you use—billing stops immediately once the cloud resource is released back into the pool. Additionally, cloud services are robust and reliable, and quality is maintained and guaranteed by the provider.

4. Cloud computing is delivered primarily via 3 service models.

Source: seeei.org.

The cloud is deployed via one of three service models—Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS). Typically SaaS involves end-user apps, PaaS deals with developer resources, while IaaS is the most basic of the three, providing servers, storage, and networking as virtualized resources.

3. The cloud is delivery via 3 deployment models.

Source: mecs-press.org.

Cloud computing resources can be accessed via three deployment models: private, public, and hybrid. A private cloud usually serves the needs of one organization, behind a firewall. Services provided via a public cloud are available to the general public. Finally, hybrid clouds combine elements of both public and private cloud deployment models.

1. Cloud computing allows for instant up/down scaling.

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Cloud computing resources can be scaled up/down based on an organization’s ever-changing requirements. This means that sudden peaks or bursts of activity will not compromise the end-user’s experience; additionally, firms can realize computing costs as variable, versus fixed.

In short, cloud computing saves small businesses time and money by reducing capital expenditures related to traditional IT infrastructure acquisition and maintenance. Lower technology expenses and increased scalability translates to freed-up resources that can be reallocated to building up a firm’s core competency or business.